Business Strategy and Growth

5 Mistakes That Can Kill Your Scale Up

In the last 20 years of running my own companies and advising others as a coach, I’ve come across the same issues that plague growing businesses and prevent them from successfully scaling up. As entre

In the last 20 years of running my own companies and advising others as a coach, I’ve come across the same issues that plague growing businesses and prevent them from successfully scaling up. As entrepreneurs, we make the mistake of letting these issues grow until they’ve crippled our companies.

Here are the top 5 mistakes I see impairing Scale Ups today.

1) Lack of communication

The number one mistake that I’ve seen affect companies is a breakdown in communication. Bigger teams mean much more to keep track of.  The solution is a daily huddle – a quick stand-up meeting first thing in the morning to ensure everyone is clear of his or her goals for the day. Keep this 10-minute meeting time on everyone’s schedule, so that you know all employees will be available! It is important to see these meetings as a tool to make decisions and not as events.

2) Lack of cash

A common issue to affect so many Startup and Scale Up companies is simply not having enough cash. I know the pain of sleepless nights worrying about making payroll for the next month. To help with this, you should focus on get money from your customers, as soon as possible! How can your business get cash from customers? Use models such as a subscription or annual membership. You can also offer discounts for bulk orders or advance payment of a year’s fees.

3) Inability to let go and delegate

After you’ve spent so much time and resources growing your “baby”, it’s hard to let go of responsibilities and delegate work to other employees. As an entrepreneur, it’s easy to feel that you’re the best person for every job -- but you can’t do it all.  You need to hire the right people and you need to let them do their job.

4) Failure to hire the Right Talent

As you grow, you will need to hire a lot of new employees. But hiring the wrong employee is the ultimate way to waste cash and resources! The wrong hire at a managerial level can cost 15x the employee’s annual salary! Firing these employees is also extremely painful. For this, I highly recommend the Topgrading methodology for hiring. It’s a great way to filter through candidates and only hire the A Players who will drive the growth of your Scale Up.

5) The wrong strategy

The last issue, that can strike your company, is a weak strategy. If you find that your revenues are not growing as quickly as you’d like -- or perhaps they’re growing, but your margins are shrinking, this is an indication that you’re in trouble and it’s time to rethink your strategy.

For this one, I recommend looking at the “7-strata strategy” by Verne Harnish, which can help you think through your strategy and ensure you stay on the right track.

If you allow these mistakes to grow in your company, it will become very hard to Scale Up! Don’t let them take over, and keep on growing!

Daniel Marcos

Daniel Marcos

Daniel is the co-founder and CEO of Growth Institute, the leading online executive education company for C level executives at fast growing firms. He also co-founded Inflection (Gazelles Mexico) a management coaching company that helps business executives and entrepreneurs grow their companies faster and with less “drama”. He is an international speaker and has shared stage with thought leaders like Peter Diamandis, Guy Kawasaki and Jack Canfield, just to name a few. Daniel is the blogger of Capitalemprendedor.com. He is a graduate of EO’s premiere CEO program, the “Birthing of Giants”, and its continuation, “Gathering of The Titans”. He holds a BS in Industrial and Systems Engineering from ITESM (Monterrey Tech) and an MBA (cum laude) from Babson College at Wellesley, MA.

Daniel es fundador y CEO de Growth Institute, empresa líder de educación ejecutiva; es embajador de Singularity University en Austin, Texas y es CEO de ExO Global Education. Experto en escalamiento, asesor de negocios y orador internacional. Cuenta con un MBA por el Babson College; se graduó de los programas "Birthing of Giants", "Gathering of The Titans" de Entrepreneru´s Organization y está certificado como CEO-Coach en la metodología Scaling Up. Creador de ScaleX, metodología que ayuda a emprendedores y ejecutivos a ser mejores líderes, tomar el control de sus empresas y hacerlas crecer 10X. Ha colaborado en medios como Expansión, Forbes, Entrepreneur y participó en los libros Scaling Up de Verne Harnish, Organizaciones Exponenciales de Salim Ismail y Clockwork Life de Mike Michalowicz.

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